Soymeal Prices Poised for Rally as Grain Prices Soar

The price of soybeans has risen to $12.00, causing some market analysts to argue that soymeal is too cheap. Sean Lusk, Vice President of Commercial Hedging Division at Walsh Trading, believes this could be a bullish sign for the commodity.

Lusk points out that with corn prices at $5.00, wheat prices at almost $8.00 in Kansas City and over $7.00 in Chicago, grain prices are high across the board. He thinks end-users will extend their feed coverage by purchasing more soymeal, which is a key component of animal feed.

China has made another significant purchase of soybeans, buying over 700,000 metric tons overnight. This sale was the largest in over a year and comes on top of another 720,000 metric tons purchased for unknown destinations. Lusk believes this purchasing activity will drive up demand for soymeal.

Lusk predicts that the price of soymeal could rally to at least the .382 retracement level at $361 or potentially the 50% retracement level at $389. He has submitted a conservative trade idea involving buying a call spread in March 2027, but notes that there is risk involved and it may not be suitable for all investors.