A couple observations. The markets rally, participants get bullish. The market breaks, participants get bearish. The crowd is usually wrong. The articles I am reading all want a bull story in beans. This in my opinion makes little sense. Now, that doesn’t mean we won’t rally. The funds are short and if they cover we will head higher. The question I suppose is how to take advantage of the market here and if we do rally further. Pick levels especially as a producer. Realistic profitable levels, and make sales. In the cash, on the board. Whichever makes more sense to you. It is your risk, and your capital. Lock in sure money. Pick some wish prices for a small percentage. Consider the following realities. The global carry in Soy has grown 20 million tons in the last 2.5 crop years. At present almost 100 million tons. The weather in South America most likely won’t change the fact we will again grow more than we consume. I don’t think, at least my research does not show, a time we have ever had Soy stocks of this magnitude and had prices anywhere near this. Not even close. I am watching bean spreads, meal spreads, the crush.
The Corn continues to grind higher. It is here that I think there is a small opportunity to remain long. The South American crop is coming down in size. By a considerable amount. Unless there is a significant change in the domestic bean corn relationship, acres will be reduced. The funds are close to record shorts. This at some point may cause a bit of distress. Look for realistic levels. I have suggested 396 – 405 basis Dec seems realistic, and potentially attainable. Use this rally if it transpires to make sales.
Be Well,
John Walsh
800-993-5449
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