This is a sample entry from Craig Turner’s email newsletter, Turner’s Take Daily, published on October 27, 2014.
After the grain markets traded lower overnight due to the Brazilian election and a great weekend for harvest, soymeal is leading the market higher by those who need supplies now. Many processors in the eastern Midwest are trying to crush as many soybeans as possible but the tightness of rail cars is limiting distribution. We are also hearing some US meal sales are being shifted to South America.
I would not be surprised if we start hearing reports of east coast/southern operators importing beans from Brazil like we did last year. That has not been announced but South American beans/meal is cheap and there are parts of the country, like the eastern Midwest and the Southeast, that needs the beans/meal and the numbers work.
I think we are seeing a big squeeze here on the commercial side and it is causing the big spec short to blow out of positions. I like the short side of beans but either trade small or stay on the sidelines until this soymeal situation stabilizes.
I have two charts below. The first is Dec Soymeal and it is obviously in rally mode, but the second is Dec vs Jan Soymeal. That is a runaway train. In my opinion, that is what a commercial short squeeze looks like…
Dec Soymeal Chart:
Dec/Jan Soymeal Chart:
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