Soybean Meal Economic Value Study – 11/17/2021

This month USDA estimated the US soybean carryout for the 2021/2022 crop year at 340 million bushels or 8% of crop year usage (excluding residual). We have scattered the October/May high for Midwest soybean meal as a function of the US soybean carryout to usage ratio  as forecast by USDA in May. Current soybean meal futures  are trading on the low side of the expected high near $500. 

The outcome of the 2021/2022 Southern hemisphere soybean  season will be the dominant force in the soybean market over the next three months. The current state of the ENSO ( La Nina phase) cycle raises the risk, but by no means ensures, drought damage in either Argentina or Brazil. Soybean meal trading on the low side  of the expected high would  present a major buying opportunity should South American weather turn unfavorable.