Market Overview: Soybean Meal (SM)

Soybean Meal and Soybean Oil are by-products of Soybean processing. Though these commodities are not annually produced, we have chosen to include the Soybean products with Soybeans, due to the relationship.

After Soybeans are harvested, the bulk of the crop is sold to processors, called crushers, because of the old practice of using a mechanical press to separate (or crush) the oil and meal contents from the Soybean. Today most processors use chemical methods of extraction, which is more efficient. Each bushel of Soybeans produces 11 pounds of Soybean Oil and 48 pounds of Soybean Meal.

Seasonal Overview:

Tax selling of last year's crop has tended to weigh on prices at the beginning of the year, culminating in one of the best known seasonal tendencies in the grain markets, the "February Break". In recent years, the February Break has occurred in late January and early February. Since Soybean Meal is a by-product of Soybean processing, the factors that affect the supply of Soybeans also affect Soybean Meal. The price of Meal tends to move in tandem with Soybean prices, while the North American Soybean Crop is developing. Prices will rally on potential damage to the Soybean crop and fall as the crop passes through critical stages of development, like planting and pollination. Prices tend to peak in May, as the Soybean planting is completed. Intermittent rallies are the general rule through to pollination in July. And prices generally fall from July through September. Prior to harvest of the Soybean crop, Meal prices


Soybean Meal: (High: May-Jun//Low: Feb or Aug) With new demand as winter feed supplement exhausted, soymeal leads complex down into "February Break." Market then joins spring rally as US is primary source of global supply. By late June, new US crop is planted and market faces intense competition from new Brazilian supplies. With new crop discounted, market bounces as crushing facilities shut down for August maintenance. By October 1, consumption rises into winter.

Chart courtesy of Moore Research Center, Inc.