The talk today was that there is progress in the China / US saga. The progress is essential. But, what will the real scenario be. I am confident there will be positives, however, not all will be bullish once the deal is over. The next rally if it transpires is a rally to sell in beans. The current fundamentals are not bullish. The Chinese are reducing their imports of beans and protein across the board. One offshoot of this could be positive vegoils. The ASF issue is slowing crush in China. Rather than run plants at a negative, the Chinese may up vegoil imports. The US could be a major winner in this scenario. There remains structural issues in the protein on a global scale in my opinion. Look at the nov 2019, and the 2020 crop years anywhere above 950, certainly above 970.
The Corn is feeling positive the last two days with progress in the talks. The private analysts are still predicting more corn acres. I don’t see the large scale increase. ( I could be wrong ). The weather looks poor for early results in field work and for early planting. This will not bode well for the corn. The question then is yield. There is an ample amount of corn in the world. However the US balance sheet could turn friendly this spring. In addition, the Chinese hold 2/3 rd of the global stocks. The global scenario could turn friendly with many scenarios changing slightly. I still favor long corn short other commodities. This could be just getting going. As always quantify your risk. There are only two sure things in life death and taxes. USE STOPS.
To contact me to discuss any thoughts 800 993 5449 jwalsh@walshtrading.com
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