Two sided trade today. there are alot of considerations here. The market has broken alot over concerns on the tariffs. This is a significant scenario and will have implications. The largest concern I have looking forward is the production growth. We are growing global carry overs in spite of record demand. Looking at this years crop. I feel we will see a 1 million acre increase in plantings. A increase in yield of 1-2 bushels per acre due to the very high crop ratings could put the ending stocks abve 600 million. There also appears to be some thoughts of china switching to new protein sources. This would not bode well for meal. It is my long term outlook that meal has the most downside on a relative basis. I am hoping there is a resolution in the Chinese dual. This would give the market a relief rally that in my opinion should be another selling opportunity. The deadline now is july 6th I believe. It is my belief the parties will resolve this because it is in everyones best interest. We win in a trade war. Hands down in my opinion.
The Corn traded both sides. It is my thought that a low has been put in place in the corn for now. There has been some talk today that the US and Mexico are coming to a agreement on nafta. If and I say if that is the case then It is my opinion that dec corn would move back towards $4.00. I believe the corn market still has upside potential , especially if NAFTA is resolved. Certainly Mexico needs the 14 mmt of corn they purchased last year. The underlying fundamentals in corn remain positive, especially given the crop related production issues witnessed globally this crop year. There is no room for error, and the demand has been strong. The early yield potential is here with a high crop rating. This is a consideration. But there is a long season left to go.
For a conversation on the markets or to consider long term strategies 800 993 5449 jwalsh@walshtrading.com thank you for all the comments and feed back
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