The Beans and meal today felt the brunt of the USDA report. The large domestic carry the slow of exports all have an effect. This one may be just getting going. The funds bought and bought on the weather scare and ran this up to a level that appears to be out of whack.The weekend looks to bring a few more showers to Argentina. This will halt the decline talk. The market will next eye the domestic plantings. A large break here may curtail the early talk of switching. It would take a significant break however. It is important to note ARG is now offering beans and meal due to the record old crop stocks on hand. The Brazilian crop may see further increases pushing the global carry back north of 95 mmt. It just seems difficult to see a long term bull move sustainable. Hoping for droughts is not making plans. Under the current scenario we may witness a major shift from corn loosing to beans, to the soy complex acting weaker than corn. Given the relative height of beans this could be significant.
The Corn eased a bit with the extreme soy weakness. It appears as I mentioned the near term high could be in corn. A pull back presents a opportunity. The global scenario remains a bit supportive. The demand is good,exports on the rise. We will need to have a good spring weather wise to not add risk premium into this market. Any issues and Corn can make some advances. Patience now will be rewarded looking for our next opportunity.
The Long term trend, relationship between corn and beans is changing. If correct this is very significant.
call 800 993 5449 jwalsh@walshtrading.com