The soy closed higher today. The market has had a reasonable break through December. Perhaps we will bounce a bit into the next usda report. The reality is there are a lot of beans available in the world. The weather overall in SA has been reasonable with a few areas that are a bit stressed. Most private analysts are expecting a larger Brazilian crop than the USDA has plugged in. This will ultimately displace the export pace of the US. A 50-70 mil bu decline in exports puts the carry at or above 500 million. The next crop year puts us near 700. There is a lot available without a weather problem. The oilshare is at 34.3% with crush margins off their high of late. The oilshare can win based on a relative play. Not necessarily due to strength in the cash. Although demand for vegoils is certainly adequate.
The Corn market may prove interesting in the first quarter. While there is a ample supply both domestically and globally. There may be some changes on the forefront. The Brazilian crop looks to be lowered in favor of beans. The US crop will be smaller based on bean acres inverting the corn. And US is the cheapest in the world at present. The demand remains intact. The funds are short 225-250 t contracts. perhaps one of the above mentioned items can spark a rally. If so this would present a opportunity to be a hedger.
Be Well
Enjoy the New Year