#5 | Who's the Boss?

Soybean oil has been outperforming soybean meal in recent weeks, up 4.1% the past thirty days and unchanged year-to-date while meal is off 2.2% this past month and 13.2% thus far in 2024.

After spending the last quarter of 2023 leading the soy complex with a tight domestic market amid strong export demand, meal has since retreated and hovers near contract lows as South American new crop crush ramps up.

Meanwhile, rallying energy and palm markets have provided support to soybean oil, leaving it the stronger of the two soy products - not on a rally - but because it has not fallen out of bed like soybean meal in recent months.

#4 | Soybean Oil: The Little Engine That Could

Soybean oil remains the only commodity out of major grains and the soy complex that can boast a net long managed money position.

Funds' net position in oil first flipped to the long side in the week ending March 26, after 20 consecutive weeks with a net short. 

The past month of buying, alone, totals more than a 70,000-contract uptick in the net (long) position - the equivalent of more than 4.2 billion pounds of oil, or 2.7 times the current 2023/24 ending stocks projection… and unfortunately, the market has yet to respond in a meaningful way.

#3 | The only constant is change

There is no place change is currently more evident than livestock futures where hogs and cattle, both, have done an about-face the past few weeks.

After spending months upon months on the struggle bus, lean hogs are off like a rocket on tight supplies and strong export demand. Their move, up 18% year-to-date), trumps recent losses in cattle where Avian Influenza headlines are keeping markets on the defensive.

The year-to-date chart above illustrates the wild ride both cattle and hogs have been on so far in 2024, but the wild ride started long before this year, however.

Both feeders and live cattle made all-time highs last fall, while hogs continued a slow grind lower, making 3-year lows at the start of the 2024 before rocketing to new contract highs in recent days.

One-year percentage-change chart for June hogs (black) in which I have overlaid May feeders (blue) and June live cattle (green):

#2 | Two Years

History repeats itself, perhaps?

#1 | One incredible chart

American agriculture - producing MORE with LESS.

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