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Commentary
Corn, soybeans, and wheat were all under pressure at the start of day trade but ended mixed aside from corn which finished up 4 cents. Soy products were firmer, and this supported the entire soy complex, as did a temporary rebound in the energy complex. Trade was expecting a bullish crush report today, and this was also supportive in my opinion. NOPA estimates 197.9 million bushels of soybeans were crushed in September compared to the estimate of 186.3. That’s well above last year as well as the 5-year range and averages for the month of September. President Trump made remarks on his Truth Social platform late yesterday that mentioned the US forgoing Chinese cooking oil imports as retribution for them not buying US soybeans. This was met by an equity selloff late yesterday but did little to get the soybean market or soybean oil market excited. Soybean oil did close slightly higher today as keeping foreign feedstocks out is viewed as a positive for the vegetable oil in my opinion. There still is much uncertainty whether China and the U.S. will meet in late Oct or early November at the APEC summit in S. Korea. Lots of ifs and maybes here highlighted by the gov’t shutdown halting any reports from USDA. Beans have held in here and are basically unchanged for the year. We closed 2024 at 10.10. Decreased volatility tells me option strangles could be explored. We are not going to kick around the 10.10 level for much longer in my view. Too many headlines coming in the next few weeks. Either we have an export market or we don’t. Trade idea below.
Trade Ideas
Futures-N/A
Options -Buy the January26 soybean 980 put and buy the January 1080 call strangle for 7 cents or better.
Risk/Reward
Futures-N/A
Options-Risk 5 cents or $250.00 plus commissions and fees on the strangle. Offer the Strangle at 40 cents to exit, for a 33 cent gain less commissions and fees.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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