The soy was lower yesterday. There are a few reasons. The harvest progress is rolling along. The US China spat is of concern. It will be a daily speculation. If the spat is settled beans can rally. In my opinion it would be a short vertical rally that would offer hedging opportunities. The markets are pointing to longer term bear markets in my opinion. There is one aspect of the trade war that I think could be important. If I am correct and this is settled, the Chinese will play catch up with US beans. This could bring the carry to burdensome levels from off the chart levels. In turn a rally in beans could keep acreage with corn more in line. That is my potential plan. The meal in my opinion still stands to lose the most. There are many reasons. The shift in China to reduce protein. It is real with long term implications. The Ukranian sunflowerseed crop and the rapeseed crop are both very large. This is not the exception, rather the norm in years to come. The crush is increasing there and everywhere. (sounds like a Dr Seuss book). The oil has been weak. The palm oil continues its decent way under cash soy oil. This may be close to a bottom as we get to the new year. Look for oilshare opportunities, with a quantifiable risk reward.
The corn remains a range bound disappointment. The feedgrains perhaps as a whole are heavy. The best laid plans often times go off course and crash and burn. Especially in commodities. I have laid out my thoughts on a friendly corn market. Many of my thoughts regarding the numbers have come true. However, the market has not reacted overly favorable. I may be missing something. Or the market may just wait out the friendly knowing that there usually is another crop to help. I am still friendly 10-15 cents here. Quantify the risk. We shall see.
Call to discuss long term ideas. The risk reward profiles are heightened given the global landscape. It is impossible to have a lot of opportunity without the same amount of risk. The important aspect is to find a way to quantify the risk. 800 993 5449 or jwalsh@walshtrading.com. Remember even Tiger Woods, Michael Jordan, Tom Brady have coaches and advisors.
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