AG Review

John Walsh Grains Leave a Comment

The Market should switch its focus to the domestic weather and the planting intentions. There is much to consider here. There are many who think the planting acres will remain down. It seems difficult to believe with beans approaching $11.00 the US farmer wont plant Beans. This goes against most things I have seen in 32 years In this business. However, and having said that nothing will surprise me. After all we have beans close to $11.00 with a 550 carry and 91 mmt globally. The argument goes that demand id excellent. Not excellent enough to prevent a triple of US bean stocks in 2 years, and a 25 mmt increase globally. What if demand wasnt record. The same thought shows bean demand from China advancing year after year. Reminds me of the housing price increases. From 2009. I believe demand is there and is solid. However, all things eventually run their cycle. Then a leveling period. Perhaps I am wrong. I just dont see where we go with all the advancements in global production in the next 1-2 years. Yields have risen in the last decade so has gross dollar income. That needs to be considered. Perhaps we go higher. These rallies are opportunities to the producer.

The Corn has topped temporarily as I have said. The breaks should remain shallow. A chance for another leg up is there given the new crop acres. If this comes to pass then weather will be important through the key development periods. The Corn rally has been welcomed and productive to the producer. A pullback to 400-405 basis dec presents the tech opportunity to buy. Quantify the risk. A move to a reasonable level is achievable if the right things occur.    It is important to watch global acreage shifts and the black sea region for any disruptions. This will prove important.

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