The markets were very interesting to me today. The question is – will there be follow through next week? Many thoughts here. First, there was a new case of African swine fever found in China. This was in a new province. The key aspect to me here is not the number of animals, but the fact it is spreading great distances. It seems logical it is only a matter of time a large scale breeder gets hit. This, in my opinion, is here to stay. This virus is powerful. The next thought is, the veg oil market may be making a flat price bottom. There are currently record net shorts in vegoils. The vegoils vs crude are very cheap. This will boost biofuel usage/ admixture. Last, think about this. The Argentinians and Canadians are buying US beans and selling them to China. Or crushing them. Going on right now. We could conceivably get into a scenario where the bean demand goes up a bit while protein demand declines. Rallies in beans are an opportunity in my opinion to hedge. Watch the 2019 (November) above $900. Think long term.
The corn may have a low in place. It is worth quantifying a risk in my opinion. The field reports are a bit below the USDA. The weather may offer some issues over the next two weeks if the forecast plays out. The US remains the cheapest supplier in the world. These few things could be the beginning of a rally in the corn market. It is my contention the corn is a bit undervalued given the stocks to usage. These factors may help to assist this thought. Please use stops or quantify your risk.
There are many inputs to consider at present. Feel free to call and discuss long term opportunities in the market. 312 208 8837 jwalsh@walshtrading.com
” ONLY THOSE WHO WILL RISK GOING TOO FAR CAN POSSIBLY FIND OUT HOW FAR ONE CAN GO ” T S ELIOT
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