The soy remains under pressure. There are not a lot of new stories out there. The Harvest progress domestically is progressing nicely. The long term weather outlooks support more of the same. The South American planting, especially as it relates to Brazil, is advancing rapidly. The Brazilian is approx 50% or so planted. The weather outlook there remains favorable except for a few pockets, but that is ordinary. The market has to look at the current export pace. Based on current estimates the USDA is overstating exports by as much as 200 million bushels. That would put the carry over at a billion bushels. It is a record at present. The price differential between the US and the Southern Hemisphere will promote soy acres down there. The end result no matter how you slice the pie is too many beans in an oversupplied position already. The questions is will the US and China rework the relationship? The answer is yes but this takes time. The Global markets, especially China, are slowing. These are not short term scenarios as I have suggested. A few trade thoughts. I have promoted short beans and meal. I like short new crop beans above 920 nov 19. Look at the meal spreads, they should be sold at even or a slight inverse. The crush margins should continue to struggle.
The Corn is a lackluster trade. The wheat weakness is not a help. The fundamentals in my opinion remain supportive of corn. The important thing will be the Nov crop report. If the carry is reduced due to a slight reduction in the production, that would be a catalyst to move higher. The key word being IF. I have favored long dec futures, with covered positions. Long futures, long puts, or short calls. I like long corn short beans and have for some time. Quantify a risk always.
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