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A combination of record imports and record U.S. soybean production look set to knock soybean meal prices sharply lower over the final months of 2014.

New-crop December soybean meal prices have been propped up in a narrow range just above the $340 per short ton level lately amid an enduring shortage of old-crop soybean supplies.

But a recent surge in bearish put option purchases tied to December soybean meal prices below $340 a ton suggests traders are bracing for a dip in the soymeal prices between now and December options expiration on Nov. 21.

BIG CROPS COMING

The downward spiral in U.S. soybean futures prices of the summer has been well chronicled, with record planted area of the crop looking increasingly likely to yield a record amount of fresh supplies come harvest.

But even as new-crop soybean prices plummeted more than $2 a bushel or 17 percent from the beginning of July to the beginning of September, new-crop soymeal prices have held up fairly well, declining less than 3.5 percent over the same period.

The recent climb in soybean meal open interest to an all-time high of just over 338,700 contracts is also indicative of rising participation and anticipation in the market, and suggests traders are gearing up for greater price volatility over the coming weeks.

Whether prices veer predominantly to the downside remains to be seen, as much depends on the bias of the soybean market, which must still complete its development and avoid any late-season frosts.

But judging by the recent activity in the options arena, most participants are currently betting that the downside proves to be the path of least resistance.