The soy broke today led by meal. The USDA will release updated stocks this friday. It is difficult in my thought , a way to see a real reduction in carry. The demand remains overstated. The Chinese numbers should continue to decline. This while they are culling animals. Up to 20% of the breeding stock ( hogs ) is being talked about. In addition there appears to be a push to increase there domestic bean acres. It is important to note that the Chinese meal stocks are + 220 mt on the year, while US meal stocks are 20% higher than a year ago. In attempting to reconcile this it is important to say that the US corn to bean ratio remains at 2.4-2.5-1. It is my belief the corn acres are being overstated and the bean acres will not be as low as anticipated. The math does not dictate the change. Nor does the field work prep done last fall. However we shall see.
The Corn continues to break. As mentioned the US was not the cheapest game in town entering this week. Also, the global trade for feedgrains has come out of Brazil, and the Ukraine,leaving the US waiting for the Chinese. If and when. The export pace remains solid. It is also my belief as mentioned corn acres will not see a big jump as predicted. ( my theory ). Corn domestically has a friendly balance sheet. The issue now is the global supply that remains well documented. This could cause a stagnant US market as we move through 2019. The corn needs a catalyst. Continued wet weather, a Chinese purchase , could go a long way.
” DONT TRY TO BE BETTER THAN OTHERS, BE BETTER THAN YOURSELF ” WILLIAM FAULKNER
BE WELL