COMMENTARY:
SOY: – The beans were under some pressure today. There are a few considerations . The export pace has been off the last two months. Even with the recent purchases from China over the last week. The overall weather has been improving and more rains are forecast for the next two weeks. The rains, if they materialize, will add bushels to areas that need the assistance. It is important, in my opinion, to also consider the fact that there may well be more double crop bean acres not reflected yet in the USDA numbers. The global picture is consistent. There have been less export sales, an overall reduction in the global crush pace. This ultimately will also add global bushels to the world carry. This while the Brazilians are exporting a bit more right in the gut slot. The south american planting is now upon us and acreage will be important. The Arg crop area may be static with more corn acres planted. While Brazil expands further.
SOYMEAL: – The meal market has rallied approx $20 per ton over the last two to three weeks. This was more to do with a correction in the oil share than any big change in fundamentals. The meal has been well supplied both domestically and from a global stand point. The Chinese meal demand has been weak, which led to poor crush margins. This is ultimately driving a slow down in bean imports. The meal in my opinion is not bullish but may now be in a sideways range , while beans and oil tell the flat price tale.
BEAN OIL – The bean oil market may have run its flat price course. The domestic market is slowing with the bio demand off. In addition the crush is slowing while bean oil stocks still showed a build. The palm oil is starting to break anticipation the stocks starting to climb. The global veg oil market still has some supportive factors. The problem or concern for bean oil is that the price is at a premium to all other competitive oils. In addition the US price is a premium to other bean oil offers. This needs to be considered.
CORN – The corn has been in a slight up move over the last two weeks. The last USDA report was supportive but has failed to support a dramatic rise. The yield reports coming from private tours now will be watched. There is little doubt that the western belt presents a real problem. The question that looms is will the good areas make up for the bad ones. The other considerations remain that we are entering harvest. The fact that the crop is tighter can be diminished by a sheer volume of crop. I remain a bit friendly to corn, however cautiously so. The market will also start to consider global plantings with thoughts that ARG will expand corn acres to a record at the expense of Soy. The thoughts of friendly corn if correct may well be more on a relative basis. The corn will also watch the Wheat for further gains which could prove supportive. This time of year presents a dynamic amount of data to consider.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
jwalsh@walshtrading.com
www.walshtrading.com
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.