Wasde released today. As I have said for the past week, this report can put a different perspective on the outlook. That is what has transpired in my opinion. First the domestic carry showed a significant increase to 555 million. The market expected a decline. The exports continue to decline, and further declines may be in the near future. This carry is significant and burdensome. The global numbers showed a decline to 94.4. Still 16-17 mmt larger than 2016. The one note. The argentinian crop drew down 7 mmt. The brazilian was only 113. Many private analysts are looking for 116-117. The point, the global numbers are big, and could increase again. The next thought will be US acreage. This will loom important. The bean and meal drove higher on weather concerns and record fund buying. The bean and meal spreads now sit at big inverses with huge carry overs and declining demand. The prices here especially for new crop look reasonable and should still be taken advantage of. The price structure seems high to me.
Corn today was the leader. The s and d reduced the carry domestically over 200 million bu. This is significant and opens the door for higher prices if, the acreage is lower than estimated. And or more global demand. The Corn has a long term opportunity to exibit some strength. It is my contention at present hedgers should use this rally in dec18 to lock in some profit. We have witnessed a nice run in corn. The next opportunity may come from acreage or weather issues in the spring. I have said I was waiting to see if we witness a major shift in the corn vs bean sentiment. This report may have changed that,and a opportunity is present. The Corn could witness a slight shift in favor of oilseeds globally. This will be the case especially if China starts to make a switch towards more soy. There are some fairly exciting opportunities in front of this planting season. The key as always will be to quantify the risk.
For a free review or to talk markets 800 993 5449 jwalsh@walshtrading.com