The soy continues to break, the beans and meal both. This is significant. I have been bearish,not due to the rhetoric and trade spat. But, because the numbers from a historic perspective warrant lower prices. I do believe history is the great equalizer. All things happen again. Having said all that I believe it is time to be cautious. Everything looks bearish now. If you are short, play some defense. Buy some protection through options. I remain bearish but am hoping the beans have a rebound. I would like to see a rally back to 930-940 level. The catalyst for this could be weather. (not todays) or a agreement between the parties,(US and China) . I do believe it is in all parties interest to come to a agreement. I also believe this will happen. Long term it does appear China is structurally changing their protein supplies. This could have a big impact on meal. As I say, I believe the meal may be most at risk in the long run. This remains to be seen of course. On the forefront now will be acreage. I expect a increase in bean acres. this is the general belief from the analysts I read. It is my belief this is accurate. There is still a long summer ahead.
The Corn rebounded today. I believe a bottom could be in place. this thought is predicated by my assumptions being somewhat correct. First, the US and Mexico work through NAFTA. I am optimistic and believe it will happen. This is the prudent scenario. In addition, it is my thought that the acreage will not increase and may decline for corn. This would be friendly on the face value. The global numbers continue to decline. The Black Sea, Brazil, now the EU, all are have problematic growing seasons This all bodes well for US exports. This could play out into the fall, then the next crops plantings should start to ease concerns. Lets see what transpires over night.
For a long term outlook in the AG sector feel free to give a call or email. I appreciate the feedback
jwalsh@walshtrading.com 800 993 5449
” I HAD RATHER BE FIRST IN A VILLAGE THAN SECOND IN ROME ” JULIUS CAESAR
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