The soy eased today. Are the highs in? The report tomorrow will be important in my opinion. It is my belief the yield could come in approx 50.5 bu. That would potentially add 220 million bu to the carry. There are so many scenarios that can play out at present. The end game here is that the carry overs are climbing. The global numbers are climbing. This all spells a longer term trend change. The fate of beans does not hinge on China, so much as it hinges on the massive global incentives to produce more and more. The meal will be interesting tomorrow. If the yield falls in my line of sight then the availability of protein goes through the roof. Given my feelings regarding the Chinese demand and the animal numbers it is my belief we will see a high in place. Look at the oct-may spreads. If I am correct they can go to a carry charge market. The oil may be attempting a near term low, both flat price and on a relative basis. I don’t want to attempt too many predictions, let’s see what happens tomorrow.
The corn was down nominally. The report tomorrow can do one of two things. First, put up a huge yield that puts a high in corn and we pull back 20-30 cents. Or, and I think this will be the scenario, the yield shows a 2 bu per acre increase and the market realizes that the demand will overtake the rise in carry. This scenario would in my opinion start a rally in the corn The current global scenario warrants that. It is my belief with a steady carry and the current world numbers corn could trade to 420 basis the dec. This would be a very nice rally and would set up a 2019 opportunity to hedge corn at approx 450 on the board. Let’s see what tomorrow brings.
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