The soy under pressure as harvest rolls on, The weather looks very solid to push harvest numbers. The South American weather has been good. There are a couple areas of concern creeping in. As said yesterday this is a normal scenario. It is impossible to plant a crop over the size area all of SA covers without some areas of modest concern. When all is said and done it is my thought the planted area in SA as a whole will be larger than the USDA has plugged in. The price differential will push it that direction. The Palm Oil market has come under price pressure again. The vegoil demand is solid. The supply is as well. Vegoil in general will only mount a large rally when and if the crush slows. Given the margins and the availability of beans,this may take a bit of time. Once the Crusher has pushed the margins down due to oversupply, then the crush will slow. That is when oil will come to the front of the market. As mentioned it is my belief the crush margins should come under further pressure in the near term. The market awaits the nov crop report. Is there more production upside ? Big crops get bigger was always the old adage. The demand ids declining. At some point China will have no choice but to capitulate. They can afford this battle.
The feedgrains in general have come under considerable pressure today. The wheat is looking to the Russian market. they have yet to ban exports. They still remains a ample amount of US wheat.Sometimes waiting on these bullish scenarios to unfold can be fruitless. The markets are replenished with other global crops. this can be important to remember. the demand is huge but so is the production cycle,and it is shorter now. Due to the global production growth and cycle. The Corn is under more pressure. The USDA report could show a reduction in yield. It is my thought the market is saying show me before we react. If the reduction in yield is not there the market could be very range bound. The weakness to end the month is helpful to the insurance pricing. Lets see what happens. Not as much excitement from the annual e15 announcement. Another show me the money to the marketplace.
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