COMMENTARY:
The beans have broken approx one dollar per bushel over the last week. This is fueled by the retreat in the energy prices. Also, the talks in Ukraine regarding a settlement with Russia. There may be larger thoughts at play here as well. First, the Chinese demand is declining. This is supported by recent sales numbers. Second, the global economy, with higher inflation and costs could witness a decline in demand as well. We spend a lot of time talking about supply. It is important to remember there are two sides to the coin. Third, the global oils are starting to show signs of supply increasing. This is important as tight veg oil supplies have been a major driving force to oil seed price appreciation. There are many governments thinking of reducing mandatory blending rates. If adopted this would prove significant. The USDA will release acreage estimates this week. Look for 1.5-2.0 million more bean acres. This without the proposed release of more CRP acres. The bean acres could grow substantially, especially given the input costs at present.
Lets see what happens the rest of the week.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
jwalsh@walshtrading.com
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