John Walsh General Commentary Leave a Comment

The soy has come under pressure of late. There are a few reasons for this in my opinion. The Chinese have yet to buy US beans. This is bothering the trade. In addition concerns over the new virus outbreak. Last and perhaps the most plausible reason is that it appears the Brazilian crop will come in much larger than the USDA has estimated. The current estimates range from 125-130 million. (123 last usda) There remains little doubt that the global carry could swell to 104 mmt. Having said that , with a swell of Chinese buying the board could rally. This could do two things. First offer a chance to hedge. It is likely in my opinion that the basis will widen. It would be important to look at deferred pricing as well if we do in fact have one more rally. It is my thought that the macro remains bearish for beans. But I do believe the market will hold this $9.00 area

The corn now exibits strength. At present the US global price is competitive. There were some unknown purchases attributed to China. In addition the funds still hold a net short position. It appears likely that this strength will see follow through as the funds turn to a flat position. The march in my opinion can still make a run to 408-412. Quantify the risk


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