The hits just keep on coming. The markets put on a big up day. There are many reasons I could site. The weather has been a bit of a concern. This now has moderated and is looking for vast improvement. The harvest should play catch up over the next seven to ten days. It is a normal year when the pace is hampered for a short time here and there. This problem should straighten itself out. The other reason to site is the record crush pace in the month of September. The crush was 160.779 mil bu. A blazing pace indeed. This is what happens when high crush margins are met with high availability. The oil stocks are 1.53 billion. 48 million lbs less than had been expected with a record crush. The oil is helped by a strong global bio demand. This crush offers a psychological boost. The reality remains the same. Too many beans. The analysts I read keep talking of a Chinese demand that is growing. I don’t see it that way. As I say, perhaps I am wrong. But I see a contracting to sideways market in front of us. This while the global crush is really ramped up. In addition, ethanol is running at a blistering pace. All this will ultimately produce a more than ample amount of protein. It is my contention we are not in the short situation reported. The numbers do not prove out the tight theory, in my opinion. Producers look at the 2019 beans, nov 2019 now 952. This looks like a selling opportunity.
The Corn is moving higher each day. The close today above the 375 dec is a nice technical sign potentially. The fundamentals are in place as I have said for some time. This window presents itself until the next cycle in South America. The crop reports could indicate further slight reductions in the overall production figures. The tech side offers a gap at 410 basis the dec. That at present is the first logical target. As I always say there are no guarantees so use stops or covered strategies.
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