Consider buying a call option on September soybean meal (ZMU25) futures.

See on the daily bar chart for September soybean meal futures that prices have sold off sharply the past two sessions and hit a contract low Monday. This is very likely due to speculative spreaders buying soybean oil futures (ZLN25) and selling meal futures due to a recent decision by President Donald Trump’s administration to increase the renewable fuel standard (RFS) for biofuels that include soy diesel. It’s my bias that the spreaders have overdone soybean meal prices on the downside and that soybean meal futures are now a significant value-buying opportunity. Price history also suggests such. And those spreaders at some point will have to unwind their long bean oil, short meal spreads.

See, too, at the bottom of the chart that September soybean meal has entered into technically oversold territory via the Relative Strength Index (a reading under 30.0).

Fundamentally, weather markets in soybeans occur during the spring and summer more years than not, and with no weather-market scare in corn (ZCN25) or soybeans last summer, this year a weather market is overdue. In July, temperatures in the U.S. Midwest heat up and rainfall patterns become less frequent.

Consider buying a call option on September soybean meal futures, with an upside price objective of $325.00 or above. The option expires on Friday, Sept. 26.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.