The market revived the downtrend with more talk of tariffs. This is going to be realized within the next two weeks as the deadline is july 6th. It is my personal belief that China will take steps to give Trump something he will accept. I dont believe that China can afford a trade war. There is to much risk for them. You need to give the President credit for one thing. He follows through on the promises he makes. That is indeed a different approach to politics. He is not swayed by public opinion. Also another departure from the norm. This friday we will see acreage. It is my belief that the bean acres could be larger than the average trade guess. Most are looking for 700 t – 1 million more acres. The next issue up, Nafta, it is also my belief that Mexico will cave as well and give Trump what he is looking for. It seems to me this will be the best path for all parties. The Nafta issue is more of a corn concern, but soy to is affected.
The corn continues to break. Partially in sympathy with beans. Partly because electronic trading has little to do with fundamentals. It is my belief the Corn price is now to low relative to the domestic projected carry. In addition, the global numbers are now fairly tight and the weather in key areas has been less than ideal. The friday acreage number can be important to corn. The average guess is looking for a 500 t acre increase. It is my belief there could be a surprise with less corn acres. This would be a surprise to the price structure. The corn weather has been good. Therefore the condition ratings are high. We will now enter key weather for corn historically. The weather looks good at present on the maps. Lets see what friday holds.
It has been my contention that globally we are entering a phase where the markets are over supplied. The soy price reflects that opinion. I believe the soy will gain production over feedgrains in the next one to two years. This could continue to weigh on soy. It is my belief the feedgrains may act independantly of this price structure. The acreage and weather in the next 30 days will be impactive to this theory. To discuss long term strategies and to attempt to capitalize on any of these theories 800 993 5449 or jwalsh@walshtrading.com
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