The soy is very difficult to trade given the continual rhetoric. If we are just dealing with the facts related to the market. There is no shortage of soy in the world. The Brazilian is exporting record amounts of beans – 10.2 million in July. This trade war has certainly aided there bottom line. This will incentivize them to plant much more acreage this year. The estimates are growing and will most likely be accurate. The average guesses are 1-3 million more acres. The US export program has been strong given the price differential with the south american. The one thing the market has going for it is we are much cheaper than a year ago. I would like to see a settlement of the trade spat. It would lift prices temporarily and create a hedging opportunity in my opinion. It is my belief we are heading to more moderate price outlooks.
The corn settled back today. Im not entirely sure why other than beans and meal pulled it down. The global feedgrain balance sheet is tight. And it is getting tighter. This creates a potentially dynamic scenario.The EU, The Black Sea region, and Australia, all have suffered issues with the wheat and corn. This could indicate further increases in prices. It is my belief corn could trade 410-420 dec, the wheat 650-670 cents dec. The US corn is cheap on a relative basis. The exports should continue to be strong. It will be important to see the USDA report on yield on the 10th. The yield will increase it is a question how much. It is my belief that the demand growth will out strip the production resulting in a net 0 for carry overs. This will create a demand scenario into the fall. Potentially
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