There are two major changes(macro) to be considered that will potentially have a lasting impact on the commodity markets. The first is that the US is making great strides in a economic way. This is true both domestically and globally. This at the expense of emerging markets. This trend will continue for some time in my opinion. The current President believes in our growth first, and that growth will fuel the rest. Rather than the inverse which in my opinion was the norm of previous administrations. The second trend is the US dollar is and will continue to pick up strength due to the above listed reasons. The war for currency supremacy will be won by the US. The currency war is a real global war and makes such a difference to the country with power. The one negative of a strong dollar (relative) can be a weakening of exports. I say can be because there are no reasons we cant control or attempt to control this through other means. To many to contemplate in this brief piece. If these theories are real then some things should happen under normal circumstances. The Soy complex given the fundamental structure, should have placed its highs. This assumes normal weather of course. In addition the meal market with a large US crop this year will face further downside. The global production in oilseeds will continue to expand due to cheaper land and labor prices elsewhere. Also because our strong dollar offers the incentive. It has been my contention that the Oilseeds will loose to Feedgrains. If my theories become reality, this trend may be just starting.For fear this piece is getting long winded. I am watching closely the Meal spreads and the Crush. Both may hold significant opportunity if risk is quantified properly. Never forget, there is always risk. This is risk taking not sure thing taking. In the near term the Corn can continue to exibit strength. The Chinese have apparently lifted restrictions on sorghum. Given the reduced plantings this may spill over to corn. As I have stated a nice rally in corn to 440-450 needs to be sold , hedged, taken advantage of.
I appreciate all the feedback and commentary. Feel free to call to discuss long term opportunities in the market. My goal is to identify long term trends in the marketplace. I believe that is where the opportunities are. 800 993 5449 jwalsh@walshtrading.com
” HE WHO THINKS GREAT THOUGHTS, OFTEN MAKES GREAT ERRORS ” MARTIN HEIDEGGER EXISTENTIAL PHILOSOPHER , LARGELY CONSIDERED ONE OF THE GREAT PHILOSOPHICAL MINDS (20TH CENTURY)