Commodity Trading:
Soybean Meal Futures
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| Supply | Demand
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Demand
/ Consumption Considerations
The
main demand for Soybean Meal is from the livestock industry.
Soybean Meal is predominantly used as a livestock feed. Almost 90
percent of the meal produced is used to satisfy the basic protein and
amino acid requirements of livestock such as poultry, hogs and cattle.
Demand for Soybean Meal has a direct correlation to the demand for
animal feed.
Also, since animal feeds are a very elastic market, meaning one
feed can be substituted for another, the relative pricing of other feeds
and meal products such as corn, fish meal, and rapeseed meals have a great
deal of impact on Soybean Meal prices.
The
largest consumer in the livestock industry of Soybean Meal is the poultry
industry, which consumes almost half of the world's Soybean Meal (53%,
based on 1997 statistics including poultry and eggs).
The hog or swine industry consumes almost a quarter of the
world’s Soybean Meal production, with the cattle industry consuming
almost 14% between beef cattle and dairy cows.
The remaining demand in Soybean Meal comes from pet food,
aquamarine and other various industries.
The
largest seasonal change in demand comes from the cattle industry, which
tends to use Soybean Meal as winter feed due to its high oil content
compared to other alternative feeds.
Feeds high in oil content area also high in fat, making them ideal
for winter feeding since the higher fat content helps to offset the
additional calories animals must burn to keep an even body temperature.
Though cattle feeding tends to diminish during the winter, due to
the inclement weather making weight more difficult to put on animals,
feedlot demand for Soybean Meal tends increase more than the decrease in
number of cattle on feed during the winter.
The
up tick in winter feed demand generally coincides with the shutdown of
crushers or processors, prior to harvest.
Typically processors tend to shut down their operations after the
South American harvest and just before the North American harvest to tune
up equipment and clean and service their machines.
This tends to decrease the readily available supply of Soybean
products just as feedlot demand for Soybean Meal is increasing.
This temporary hole in supply will exaggerate the feedlot demand in
most years, causing prices to rally.
Also,
since animal feeds can be substituted for another, the relative pricing of
other feeds and meal products have a great deal of impact on Soybean Meal
prices. Major
macro economic factors such as income levels, consumer tastes and economic
growth rates have a great deal of impact on the demand for Soybean Meal.
| Overview
| Supply | Demand
| Seasonal Overview | Seasonal
Charts |
| Preview Order Form |
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