Commentary: The soy was mostly mixed today. The fund estimates for the day, for those watching, were sold 1400 contract beans, bought 1000 meal sold 1000 bean oil. The meal was able to close higher despite the fact that Chinese meal was sharply lower last night. There are many unanswered questions that will have an impact going forward. Will the Chinese buy the US beans soon? They have purchased Brazilian in the last 60 days. The South American crops are a bit smaller than previous estimates but still larger than a year ago. What effect will the currency, the export taxes in ARG have on the exports? Especially as it relates to ARG meal exports. This has helped the meal spreads invert on the board. The US export pace could show an improvement that the USDA does not have penciled on the balance sheet. However, there are thoughts that the acreage is switching in favor to beans. This is possible as mentioned before. It may take a run above 9.00 new crop to solidify this thought into fact. At present, oil share is at approx 29%. The crush margins are back above 1.00 at 114 basis May. The near term concerns have sent the meal spreads and the nearby margins higher. Watch these spreads and relationships as a precursor to what may be next. A strong rally in the beans from these levels will present possible hedge opportunities. Exercise caution in these volatile times.
Trade Suggestion(s)
NA today
Risk/Reward
Futures-
Options –
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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