The Soy complex is really caught here with many crosswinds. If played properly there is opportunity. The opportunity can disappear in the blink of a eye. The Meal was on fire today. The oil share retreating to 29.3%. The meal is rallying on the thought thatthe Arg crop is low and meal exports are declining. True! The Chinese are looking at opportunities to retaliate. Beans could be logical. In theory. This would send there meal prices higher. But a question . If the Chinese cancel our beans, wouldnt that mean we have more beans and less avenue for the meal ? Given the Crush margins, and the already ample carry, the prospect of more beans not moving, and more crush to capture the profit would, in my opinion be bearish domestically, not bullish. However, as I have learned the best laid plans as they say. I believe these bean prices are a opportunity to the producer. I cant go against what I know and have learned over 30 years. Now that doesnt mean it will work. However, I have to think the fundamentals do make sense in the long run. Its the short run that can be costly. My Macro thoughts remain bearish the soy. Treat a rally as opportunities to make timely hedges. Lock up profit. Informa who in my opinion is excellent, estimates US planted acres at 91.5, up 1.5 million acres. The Global production is estimated at 360.4 mln mt. That is a increase of 24 mmt from the previous year. My Question is. How much do we nee ? we are growing global oilseed carryovers and plantings at a very brisk pace. i cant help but feel there is a disconnect somewhere. Perhaps it is me.
For a conversation regarding the markets please feel free to give me a call 800 993 5449, jwalsh@walshtrading.com you need not be a client, I am happy to talk ideas. I will be traveling part of next week and may not appear.
Be Well