The soy complex was weak today. The beans and meal both were under some pressure. There was a correction in the oilshare and this was the main catalyst. The bean oil stocks came in lower than anticipated. It is to early to say if the meal has put in a high. The technical picture does not indicate it has. The beans continued down flat price and continue to lose to corn. There is certainly a potentially long term trade here. The weather remains conducive to planting, there are no indications that the US/China spat is over. The US has not sold any beans of late to China, as I have written for some time. We continue to predict more and more demand year after year. I think it prudent to anticipate a stagnation at some point. Perhaps the Chinese hog production is a precursor of things to come. Whichever way you slice the cake we have a more than ample supply of beans domestically and globally. The new crop carryover estimates will be all over the place. From 380-600 mln bu. Next week USDA report will be important and offer insight into the numbers. It does little good to predict the numbers. There seems to always be surprises.
The Corn was steady to a bit lower all day. The corn has reason to be supported. The weather remains of concern in Australia, The Black Sea Region, and Brazil. All feedgrain concerns. The USDA next week should offer numbers that would indicate a corn carry in the 1.5-1.6 bil bu range if the weather remains normal through the growing season. A 1.5-1.6 bil bu carry is friendly and will continue to offer support. The US is positioned nicely to pick up export business. The old crop stocks remain ample so there is a ready and willing supply of grain on rallies. The market will be watching the weather for any bullish inputs. As always quantify your risk.
The Corn is gaining on beans and could do so into the report next week. This may be a long term opportunity.
For any insights, please call 800 993 5449 or jwalsh@walshtrading.com. I am focused on attempting to identify long term opportunities in the market. I appreciate all the comments and calls. Feel free to do either, there is no obligation.
DAILY THOUGHT – “FALL SEVEN TIMES AND STAND UP EIGHT ” JAPANESE PROVERB – this seems appropriate for trading.
BE WELL,
John Walsh, President, Walsh Trading, Inc.
800-993-5449
jwalsh@walshtrading.com