The markets witnessed pressure all day despite the continual news about potential dry weather in Argentina. It is my opinion we are on some major changes in the Ag markets. looking at some of todays developments. The Chinese today put a halt to Sorghum purchases. This could delay up to 1 billion in purchase orders,shipments. Many speculative reasons. Perhaps the reality is the Chinese are reaching a saturation point. The overall growth has been great over the last decade. this has fueled massive purchases. maybe we are at the high end of the range and a period of stagnation is due. The Chinese corn prices have increased, however the stocks have been large for some time. This could have a impact on many aspects. With more sorghum, corn, ddg’s, where does meal need to go. in addition, the meal stocks are larger than anticipated, along with a blistering crush pace. There really is a lot out of whack here. In my humble opinion. The soy today came under pressure. The oil share made nominal gains. The bean and meal spreads alike are moving away from inverses, and towards carry markets. This trend should continue in the near term. The market will eye the USDA report due Friday. The expectation is for larger bean carry, a slight overall reduction in south America. A stagnant global carry. All this spells lower prices, if Argentina receives some sustaining rain.
Be Well,
John Walsh
President, Walsh Trading, Inc.
Phone: 312-208-8837 or Email: [email protected]
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