The soy is experiencing a quiet day overall. The market is digesting the recent break and perhaps consolidating for a minute. The weather looks conducive to bringing home a very large soybean crop. The reality is that we have priced in a realistic price relative to the historic numbers. My contention is that the prices are supposed to move to these levels given the domestic and global stocks to usage. It will take a major issue to change this reality. A tremendous crop failure. It appears to me that we will be talking subsidy payments very soon. In addition to the US supply, South America will expand plantings due to the price difference, the currency incentive, and the cost of production. Rallies in soy need to be sold! In my opinion!
The corn has been falling along with the soy. The crop is large, no question about it. It is my contention, however, that the pro farmer tour could ultimately be correct and that the USDA number is accurate or a bit high. If this reality comes to pass, the current carry remains friendly, in my opinion, given the global landscape. I look for the exports to fuel a price recovery. This low could be occurring. However, it is possible that a low may not be scored until 75%-80% of the crop is harvested. Perhaps users need to start to extend coverage at these levels and a bit lower.
I appreciate all the commentary. To have a discussion please call 800 993 5449 or jwalsh@walshtrading.com. I attempt to assist with long term trading/hedging ideas.
” TO SEE CLEARLY IS POETRY, PROPHECY, AND RELIGION, ALL IN ONE ” JOHN RUSKIN
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