There are only a few constants and trading these markets would not fall under this at the present. It seems logical to look at the things we know have some relevance and historically effect the market. the basis levels, the global numbers , the global price differentials. At present we have large soy stocks and friendly feed grain stocks. At present the Chinese meal market is tumbling. The Chinese hog market has imploded price wise. The USDA is estimating a 6 mmt increase next year for China bean imports. I personally question the thought behind these numbers. To assume China will take mass amounts of soy and soy related product from the US seems bizarre. Yet that is what is published all over every day. I am wrong as well at times. There is no doubt. But I believe in the process of understanding the market. Not just the funds are buying we must to. The South American currency situation offers a opportunity for the farmer there to sell at wonderful prices. This currency difference also offers incentive to up global production. This of course is next years numbers. All of this is offered as food for thought. The main point rallies to me in the soy are hedging opportunities. Quantify your risk.
The corn today felt strong early. The market settled as the day went along. the feedgrains ( wheat ) continue to impress to the upside over global weather considerations. The Corn given the domestic and global numbers should be supported. Any weather problems can push the carry to a tight situation. It is my belief over the medium to long run Corn will gain on beans. The demand for corn remains solid and intact. This should not change. The user needs to take coverage in the nearterm. Breaks may be opportunities.
” IT IS UNDESIRABLE TO BELIEVE A PROPOSITION WHEN THERE IS NO GROUND WHATEVER FOR SUPPOSING IT TRUE ” BERTRAND RUSSELL BRITISH ANALYTIC
BE WELL