SOY
The Soy Complex has been supported by the weather in Argentine. A continued call for mostly dry conditions over the next couple weeks has the market concerned. a couple releases of late. Private company Informa announced their estimates for bean acres at 91.2 mln , this is one million more than last year. they look for a 2018/19 carryover at approx. 540 million bu. This is a continual growth of carry overs. If realized will be a continual burden to prices. It is possible that the acreage increases further given the price relationships especially between beans and corn. It seems that 2 million acres is possible. The Bean Oil was a price leader today. The recent weakness sent oil share to its lowest levels in months at approx. 32 %. This may signal a short term bottom in the bean oil. With respect to the flat price in beans, the perceived weather issues in S America will keep a temporary bid under the market. Further rallies should be used to clean out old crop, and advance new crop sales. While a draw down in Argentinian production is occurring, the Brazilian crop has grown, and production will out pace demand yet another year.
CORN
The corn market has not been able to do much. Stagnent. There may be a small rally on the horizon. This rally should present opportunity to make some sales. Let me build a slightly friendly scenario. Don’t misunderstand, Not a big bull opportunity, just a rally. First, the funds are short a lot of corn. 250 thousand contracts or so. The global production numbers are in decline. The Weather in South America is causing significant declines. Brazil 88 mil tns vs 95 mln estimated. Arg 52 mln vs 56 mln estimated. This is 11 million tons and is significant. Lets assume the US acreage for corn shows a yr on yr decline of 2 million acres. With a normal yield, we are looking at a 1.9 bln carry. Not a bull story but certainly a bit friendly until the crop is made. This scenario offers a rally in dec to 405 ish. Maybe a bit higher if a weather problem shows. Which usually happens perceived or real. It is my feeling the shorts could be forced to cover with a bit more rally here. Perhaps 4-5 cents. We are flirting with moving averages that may facilitate this cover.As I have said for some time. Rallies above 4.00 in corn need to be sold. The key to profits in the corn market will be successful marketing.