The USDA report saw little in the way of change. There may be much to take away from this. The soy carry reduced 10 million bu on an increased crush. Let me point out that the exports are left unchanged ? Really ? The Chinese imports were left at 88 mmt. This is 3 mmt higher that the Chinese ag minister has plugged in. We have $9.00 beans with a 900 carry. Two seasons ago a 300 carry. The beans and meal in my opinion are way overvalued. The meal price will push a healthy crush pace until we are swimming in protein and a shutdown will be forced. I am eyeing bean oil on a relative basis. The Chinese will be forced to import more vegoils as the ASF continues to deconstruct protein demand. The ration has cooled there as well. More corn less meal. ( The Chinese run a hotter ration historically ) . The next levels will be discovered based on acreage. I don’t see a big bean reduction coming. To the contrary, I won’t be surprised to see an increase. As always, these are my thoughts and carry the risk of an equal weight. My point – quantify your risk.
The Corn close could have been important today. The inability to push to new lows on a slight domestic increase in carry may be significant. The corn demand has been good. The thoughts now are that the South American and the Black sea region will cut into the US situation. This is possible and was a concern for a window of success. Now, the market will shift attention to acreage. I don’t think the market buys corn acres. This could leave the US in a tight situation with little room for error. In addition, it is not talked about enough, but China has 2/3 rds of the global corn stocks. As well as a large percentage of world wheat stocks. This seems to me to open the door for certain issues if all the numbers are correct. Monday may be important for corn.
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