There are many considerations here. The dollar is back above 90 on its way to 92. This strength may continue. This is brought up as a consideration moving forward.
The beans rallied early on the strength in meal. As we moved through the day we eased on some of the real outside influences. The weather has improved and progress is being made. The Brazilian crop has gained in size and at present they are picking up the lions share of the Chinese business. The US is not selling to China at the present time. This may change, but what if we witness a slight slowdown or a stagnation? This lack of sales is real and should be reflected in the next USDA report. The carry should move to approx 600 million bu. How many beans do we need? Will the acreage expand? Most think so. If both of these scenarios play out, is the current price structure reasonable? Time will tell, but historically the answer would be NO. The meal will be the key to the bean price. If meal has put in a high, so have beans. Remains to be seen
The corn continues to trudge along. The fundamental story remains in tact. The Brazilian crop is declining with a current weather model in place. This looks to remain supportive in the near future. The acreage will be a key component to where we go in the near term. A further reduction will ensure a tighter carry. The last interesting note for the day is the next USDA report will break the Chinese stocks out, and they will be viewed as their own line item. The global landscape without the Chinese stocks will appear different. The main point is that corn has a friendly story. The upside is 430 – 440, in my opinion. Possibly 450. As always, quantify your risk.
Call to discuss the longer term outlook on the market. 800 993 5449 or jwalsh@walshtrading.com
Thought for the day: “THE DANGERS OF LIFE ARE INFINITE, AND AMONG THEM ARE SAFETY.” – GOETHE
BE WELL,
John J. Walsh, President, Walsh Trading, Inc.
800-993-5449
jwalsh@walshtrading.com