The Beans and Meal are continuing their recovery. Today the Chinese and the US said they would open dialogue regarding the trade dispute. This was viewed as a positive. It is my belief that the recent highs in beans will hold. The Nov 2018 high is 920, the Nov 19 high is 950. The weather is near ideal to finish off the season. There will be beans cut in the next two weeks. This will start the onslaught of harvest pressure. I believe this will affect the beans and meal both. The Chinese scenario has done a couple of things. It has given the South American farmer right before planting a reason to plant more beans. The acreage there, without a problem, should expand more than earlier anticipated. Also, the spat has forced China to reassess the way they are purchasing protein. They will buy alternative sources. This fact may not yet be part of what the market is watching. It is my belief it will prove to be bearish. A further rally tomorrow is an opportunity to sell beans, in my opinion.
The Corn in my opinion has put a low in. The 366 level basis Dec 18 could be a significant low. It is my belief the exports are understated. The number could be significant. If the exports pick up the carry will have a difficult time staying in the range they are. A reduction from the 1.6 level could open the door for a move back above $4.00. The global scenario supports the US being the most important game in town as far as exports go. The global feed grain shortages in general open a 6-8 month window potentially for the US. In addition, it appears from talk that the US and Mexico are working to find a resolution to the differences on NAFTA. This would be positive and offer a psychological boost to the corn market. It seems prudent to take coverage on feed needs in this level.
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