The USDA report was released. Looking at the numbers I would like to draw some comparisons. First, the soy carry was reduced 5 million bushels to 550. Two years ago we had a 197 carry. Interesting to note the price with almost 3* less carry than today was in the same range with a brief high of 12.00. Two years ago the global stocks were 78 mmt, today 91mmt with growth expected in the next 6-12 months. There is a point when fantasy collides with reality. I don’t know when exactly that will be. I do know there is nothing new under the sun. Given the high crush margins, oilseeds in general will continue to be crushed at a record pace. This will serve the protein demand despite the Argentinian situation. Now this remains my opinion and before today oilshare has been in retreat, so my thoughts have been openly a bit off the mark . The questions remain regarding biodiesel, and at present oil stocks are ample domestically. I must continue to suggest the producer use any rallies in 2018, 2019 to price production. I can’t but think these are historically high prices given the supply.
The Corn may have cooled for a minute here. Any breaks should be shallow for the time being. The old crop stocks inched up. The new crop is what will need to be watched going forward. There is reason for some concern as global corn stocks have declined 33 mmt in the last year. Also, the demand out of the US has reason for optimism. With planted acres declining the market has a shot at holding a bit of a premium to see how planting works out.
To discuss specific ideas please call 800 993 5449 or email jwalsh@walshtrading.com