SOY COMPLEX
The Beans started higher again, fueled by meal. The rally stalled and nominal gains on the day were recorded. The weather in Arg remains friendly as rain has yet to materialize in a meaningful fashion. A few small amounts here and there. This rally has extended itself and seems to be stalling. The impetus is lacking to turn. Some insights: The global numbers may well draw down. The level though is so much higher than 2-3 years ago it seems carried away. The private release from Brazil Agro today estimates the Brazilian crop at 117.5 mmt. This is much higher than the USDA has in place. Where the Argentinian crop comes in will be important for the moves especially as it relates to meal. The Soyoil has just turned positive on the charts. The need for more bean oil may play out in the medium term as the bio fuel mandates are required. The Argentinian ability to procure beans for crushing will become important for vegoil going forward.
CORN
The Corn posted a solid performance. There remains room for further fund purchases. The Corn reached $4.00 dec18. It is my belief a move to $4.00-$4.06 was and is possible. The Long term export outlook is improving. Based mostly on the drawdown in ARG. In addition issues in the Brazilian 2nd crop could lend support. The Acreage domestically will be important to see if we will draw domestic stocks below 1.9 bil bu. This in my opinion will be necessary to sustain a more meaningful price appreciation. It is my contention the downside is somewhat limited even if the up move consolidates. There is enough concern and time to wait on the acreage, and any potential weather threats.
TECHNICALS – This commentary is representative of my own proprietary technical levels .
BEANS – (JULY) The beans are in an up trend. To potentially break the up move a close below $1037. then $10.30 is needed.
MEAL – (JULY) The Meal has been the leader of the up move. To potentially break the up trend a close $367. then $361 is needed.
OIL – (JULY) The bean oil recently broke its down trend and is now in a minor uptrend. Will it remain. To break the uptrend a close below 32.68, then 32.58 would indicate the uptrend is not following through.
Two prices are used as a confirmation that an opportunity may be presenting itself. Stops should be used at all times. The IDEA is to identify long term trend at the beginning of the moves. Or to place stops if a trend was caught and maintain profits. The most important rule is limit a loss.
To discuss any specific trade ideas – 800 993 5449 or [email protected], I may be out tomorrow afternoon.
Be Well,
John Walsh