In an earlier post, we noted that things were looking good for end-users of corn as the longer-term seasonal charts and the seasonal chart of December corn prices when yields were trend or higher point lower in the second half of the calendar year.
Not the case for protein meals as most of the seasonal charts of December soybean meal indicate that the lowest prices of the year are seen between January through June.
Similar to the graphics on the seasonality of December corn, we have two charts that portray the seasonality of December soybean meal futures.
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First is the five, ten, and 25 year seasonality that shows all three starting the year with prices below their yearly average with the 10 and 25 year charts rising to a yearly peak around the beginning of September when prices then ease back with the low in the second half of the year occurring around the beginning of October before values rally again into year end.
The five year seasonal exhibits a slightly different pattern, falling after the first of the year to a low around March 1st, coinciding with the start of the South American soybean harvest.
From there, values tend to increase rising to a peak around the end of August-beginning of September similar to the 10 and 25 year seasonal but the run to all-time highs in recent years has made the five year peak higher.
The second chart shows the seasonality of December soybean meal futures in good years or when yields are 4% or more above trend, average years when yields are around trend, and bad years when yields are 4% or more below trend.
In bad years prices start out at the lowest levels of the year and rise almost steadily save for a couple of setbacks seen in early April and mid-July with a very strong rally noted in June and July.
The seasonal for average years is basically sideways action for the first half of the year with prices rising then from early July into the end of the year.
The only seasonal pattern that offers the promise of lower than average prices is when yields are 4% or more above trend.
Prices here generally push higher for the first half of the year and then embark on a steady decline starting mid-June with prices at their lows at the beginning of October, often coinciding with harvest hitting the halfway point.
This may be one of the lucky years for uncovered end-users for similar to corn, soybean meal futures have been getting clocked over the past month as perceptions grow that the U.S. will harvest a monstrous soybean crop this fall.