The soy under pressure today. The tariffs are starting. Both the US and China implemented their respective plans today. There will be more forthcoming. The soy yields from the USDA look accurate to under estimated given the field findings from the pro farmer crop tour. The oil world publication estimates the USDA bean yield could go up further. There was a fourth outbreak of african swine flu in China. The neighboring countries that produce swine are taking precautionary measures. It is perplexing to me why this is not garnering more support. The meal is now lower for the year. The funds are still long by many estimates. The global cash markets are not reflective of a bull market. To the contrary. Estimates for the south american planting are starting to rear their head. Most estimates are coming in with a reasonable brazilian expansion. The overall south american production could be 20-24 mmt larger than last year. The demand base had better remain large. We are sitting with record stocks right now.
The corn was under pressure with the rest of the complex down. The corn, in my opinion, may have put its low in today. If not, it is my belief we are very close. The cash markets will now print prices sub $3.00 in some ares. More importantly, the US this fall is the cheap supplier with product available. It is likely, given the current fundamentals, that the corn will start to build a nice demand base at these price levels. The last issue is it is talked that the NAFTA agreement with Mexico is close. An announcement here would serve as a boost to the corn market. It is my belief corn has upside yet this year and into the new year.
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