There are many moving parts in the volatile landscape. The beans are certainly burdened with a record carryover. The Chinese will be sending a delegation to work things out with the US. The South American planting will soon be underway. Some thoughts. It is my belief now, and for some time, that China cannot afford a trade war with the US. In addition, Trump plays hard ball. Period. Like or dislike it, he puts the US first. The Chinese economy is feeling the pressure. Regardless of what they say. Most released economic numbers from China are showing a slowdown. The long term ramifications to a settlement in my opinion are not a game changer to the beans. The market is so over supplied it is doubtful China would take enough to clear the burden. The beans may be entering a bit of a bear. Another story getting reported, but not followed extensively, is the African pig flu in China. Now found in two provinces, forcing the shut down of the largest slaughter house. These diseases spread fast potentially. Especially with the lack of transparency in China. I’m not saying it will spread. I am saying if it does, it is a game changer. The last thought on the soy. It is my belief the recent highs will hold. We may not break a lot at present, however, due to the price disparity between the US and South America. Bean sales are solid. Food for thought.
The global feed grain situation continues to get a bit tighter. The Corn is not responding yet in the fashion I thought it would. It is grinding higher, not a lot of gusto yet. Perhaps the transition from enough supply (currently), to a bit tighter situation (coming) has not transpired. The corn yield will be watched closely. It appears that PRO Farmer starts their annual crop tour next week. Field samples will be welcome. It is my belief corn still has upside. The demand should remain stout given the global production shortfalls. Russia working through a tight wheat situation. This is not corn but, indicative of the global scenario. It is my suggestion that users need to step up purchases of their feed needs. Producers remain patient. As always quantify your risk.
Key Factors to watch 1) pro farmer tour next week 2) Chinese hog flu issue 3) Russia wheat tax.
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” PATIENCE IS BITTER, BUT ITS FRUIT IS SWEET ” JEAN JACQUES ROUSSEAU
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