The first is the soy. The market apparently does not think Trump and Xi will work out their differences. As I have said, it will take some time, but China will capitulate. Regardless of the timing, there are too many beans in the world. The SA weather is excellent overall. The US harvest is wrapping up. The export numbers tell the tale. Way behind year ago numbers in sales. This could change, but not enough to make a percentage difference. Let’s pretend China bought mostly new crop beans into the beginning of the year to make amends. The global numbers will still remain the same. The Brazilian planting is record. There will be beans ready for export come January. They will move wherever is necessary. In addition to all this, the protein market should start to feel the burden of oversupply, everywhere but China. The global rapeseed meal, and sunmeal are available at much cheaper prices (not the place to debate protein levels). Also, the African swine flu continues to spread and there are concerns it is being under reported. The point: meal in my opinion is starting a bear phase.
The corn continues to be a dog with fleas as Gekko would say. The Corn from US represents value. The export sales look solid compared to a year ago. Yet corn can’t/won’t rally. The feedgrains in general may have found a bottom. The Black Sea is pulling in offers (Russia) for wheat. This could bode well for US wheat for a bit. This could offer the corn some support. It seems likely that the calendar and price could force the basis higher in order to get some corn moving. I cautiously favor long corn. The January puts remain inexpensive and can offer a defense if the market does not find a bottom.
I hope Thanksgiving was enjoyable. To look at long term outlooks into the new year please call 800 993 5449 or jwalsh@walshtrading.com
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BE WELL