There was a single solitary compression in soy bean oil on Thursday last week, followed by a break up on Friday. This is our cue to buy some, which we advise doing right now. The appropriate contract to buy is probably not soya oil but soya meal or soya beans – the demand for this whole ‘complex’ has risen in recent years because newly-rich Asian countries are eating more meat and the livestock that make the meat are often fed soya meal. There is also a fairly severe ‘El Nino’ building and a reliable consequence is the sharp reduction of anchovy stocks in Pacific fisheries near the Chilean and Peruvian coasts. These fish are caught for making fish meal which is a competitor for soya meal, leading to soya meal being the most obvious candidate to buy. Our model portfolio is already full of long positions in the commodity markets, so we may not be able to adopt this position, yet. Charts:
