COMMENTARY:
SOY
The soy started higher after the conditions report yesterday showed a further decline. This was a bit of a surprise to the market given the recent rains that have been received. In addition the Chinese have been recent buyers of soy from the US and the southern hemisphere. The bull story coming into the close may be tired. The recent purchases from China while positive, are not enough given the overall slow down. The crush continues to slow a bit here as the bio demand has slowed as well. It is probable, in my opinion, that these facts contribute to a higher ending stock. In addition the weather now over the next two weeks is critical and despite the conditions report, may well add bushels. The products are correcting with oil share under a bit of pressure today. The global oil stocks will start to improve. It is true at present the US bean oil price is the highest in the world. Relative to competitive oils. The point perhaps the highs are in. The meal remains lack luster although has had a reasonable increase of late. I am suggesting to exercise caution. The highs may be in. If so, the beans will have some down side adjustments in the future. As always quantify your risk.
CORN
The corn conditions continue a decline yesterday. The comment regarding corn is similar to beans. The corn is tired. The harvest is upon us. The carry is tighter. But a large crop is on the way in. The global picture remains the same. The brazilian crop has declined. The global crop has declined. These are friendly inputs, however, perhaps the market needs to reach a lower level to find support. I am cautious regarding corn. However, I do think on a relative basis corn may hold some strength. I am watching closely the corn bean relationship. As always quantify your risk.
On a general note. I would like to say. In my opinion, risk globally has gone up given the recent happenings in Afghanistan. It is tragic what the global picture presents in my opinion. It is important to view the whole world with an eye towards risk in my opinion. There are many unknowns. The one thing I can say, in my opinion this last eight months has been one mistake after the next. It actually is disheartening.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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