Commentary:
The soy was very well supported today. The market was led by meal early on. The bean oil, as well as oil share, were the large winners by days end. The market today was supported by the general fundamentals. In addition, talk that Ukraine may need to purchase US beans as the domestic market has tightened. The global veg oil market remains well supported at present. The meal as usual follows the beans. However, it is a consideration that meal on a flat price is a bit pricy. The market is watching the South American weather. This has played out well over the last couple of weeks and has by most accounts allowed for a potential increase in production. Depending on the next two weeks there could in theory be further production increases. This of course remains to be seen. The US balance sheet can remain tight for a bit of time. The question now is when will Brazil cut the US out of the export arena. The early estimates which I happen to agree with, are for 5-7 million more bean acres planted. This alone won’t alleviate the tightness. However, I am in the camp that the Chinese demand will stagnate. Especially for beans. Feed grains are a different animal. A stagnation will take the pressure off the market, as the South American crop comes on line.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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