Could anyone tell me if Soybean, Soybean Oil and Soybean Meal 'should' move together? Cheers! Spring is here!!
I've no idea about the soy complex, but I suggest that if you wanna check the correlations get some long term charts of each and do a quick visual. If you wanna delve deeper maybe a book on the fundamentals might help you more. Try these: http://www.amazon.com/exec/obidos/ASIN/0471893765/qid=1019202520/sr=2-2/103-8117157-0124669 http://www.amazon.com/exec/obidos/ASIN/0471020567/qid=1019202520/sr=2-3/103-8117157-0124669 Cheers
Am new to this forum, and don't know how to link a URL, but on the CBOT web site there is an excellent explanation of hte Soybean Crush: http://www.cbot.com/cbot/www/cont_detail/0,1493,14+477+6173,00.html If this link does not work, you can find it under "Knowledge Center" and then Under Ag Product Information. You will find it there. Keep in mind there are NO absolutes in Commodity trading strategies. But the more beans being harvested and crushed, the greater the supply of bean oil. Bean Oil competes with Palm oil on the world market. I could go on, but will not bore this forum. Good luck.
Dojibear, In general they should, and for larger moves they do, but you can see some significant variances day to day. Personally I watch the soymeal contract for the real clues about this market. I consider it to be the primary market. Soybeans are just the parent product, and bean oil is a byproduct. I keep a jar of soybeans at the desk (along with other commodity decorations) and you'd be surprised, most of the cityfolk don't recognize them and don't have even have a clue what they are. (I suppose I don't help the matter very much by having a couple of ears of a very old strain of corn which most people guess is wheat.) And few people would say they have soymeal in their pantries, not realizing it's in lots of their processed food. For some reason retail traders like to trade the oil contract, and that makes it difficult for me to trade. You never know when the school of fish is going to change direction. I suppose they like it because it's a little smaller contract, and most people have a bottle of the stuff in the pantry, so they can relate to it. For large price moves, the crushers will keep the contracts roughly in line with each other. As far as smaller moves go, it's not uncommon to see meal trading lower on the day and oil trading higher. Pay attention to the meal, that's where the money is.
Thanks for all the infos... and having some beans in a jar on the desk is a neat idea... let's see now... some bacon, ...a goat (or cow) head, ... and a few nuggets of gold should be nice too.... Cheers!
Well, I've got some cocoa, a coffee bag, oatmeal, a couple of Canadian dollars, always a couple of oranges, and a wooden ruler to represent lumber. Also a little clay piggie and a cow with a baby cowbell. I wear the silver. My wheat stalks never survive the whole year and I have to replace them every summer when the new crop comes in. If any wheat farmers read this, I would proudly display a couple of your specimens after the harvest.
look at the attached chart of bean oil. Dec. 20 calls are going for about $300 . Since this is a chart and a trade in play I am placing my disclaimer here as well. Sincerely, Ilan Levy-Mayer, M.B.A Vice President Cannon Trading Co Inc.