The WASDE report today did very little to change the structure of the market. In essence all the numbers were left the same. The global carry grew a nominal amount. There are a couple takeaways to consider in my opinion. First the Brazilian crop was raised 1 mmt. Second, the Argentinian crop was lowered. However, the plan for Argentina going forward is for a larger product export. This is important in my opinion. It could mean that the USDA meal export numbers are overstated. It is my thought that this will be the case. In addition the concerns regarding The ASF in China could still have demand issues going forward. The US crush continues on a record pace. If any of my theories prove correct, then the meal will continue as the weak leg of the soy. The current oil share sits at 38.6 %. This is not overly high from a historic perspective. The domestic acreage is next up. Lets see how this plays out.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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