AG
SOY
The USDA report today was mostly as expected . The 20/21 carry 135 million bu. The 21/22 carry a bit larger than anticipated at 155 million bu . The reality is both are still tight ending stocks. There exists no global tightness. However, due to the extreme situation in the US, this years bean crop is very important to the global numbers. The weather will be key as said yesterday. The North Dakota crop is under real stress at the moment, as well as some other areas. The current weather models are in disagreement. The US vs European. The end result over the next 10 days will be important to price discovery. The carry in the new crop grew more than anticipated due to the poor meal off take. As said yesterday, the crush is oil driven for the time being. The meal spreads are reflective of the lack of nearby gusto. As far as the vegoil goes, the US is a bit out in front of the global pricing. The issue, however, is that the South American bean oil to the US thought needs to account for 19% duty. Changes the game. In closing, the weather will dictate flat price in the next two weeks before acreage. Quantify the risk.
CORN
The USDA lowered both old crop 1107 bil bu, and new crop 1357 bil bu. The global corn stocks declined a nominal amount to 289.4 mmt. The corn story remains a supportive market. The Brazilian second crop failure will continue to push the need for the US to produce a very respectable crop this year. The balance sheet is somewhat tight. The weather will be key in the next two weeks. The risk in the northern belt is not as severe for corn. However, there are other areas that remain key, experiencing some concern. The demand will be a driving factor as well as the acreage at the end of the month. It is my hope that corn has one more nice rally prior to acreage. Quantify the risk
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
jwalsh@walshtrading.com
www.walshtrading.com
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