The meal rallied today. The thought of Argentina putting an export tax on beans is pushing meal. This to me does not make sense. The US harvest is upon us and the size of the crop will allow Argentina, and any one else for that matter, to buy beans, import and crush for profit. The world is awash with a record amount of soy. This is a fact of the numbers. Other than an act of God, the stocks are and will remain burdensome. This is not due to China either. It is due to overproduction. The company INFORMA came out today with crop estimates. They peg production at 4696. The USDA last month was 4585. Under this scenario the US will maintain approx 800 million bu carryover. That is correct. Unprecedented. The meal market is well supplied. The meal carry will be burdensome as well. Yet here we sit at 315 per ton meal. It has been said by me that the last time we had bean prices here we had approx 250 meal. Now, in addition, the Chinese are cutting imports and have an issue with the their swine population. Enough concern that the UN has called an emergency meeting. Perhaps my idea is incomplete. But I just don’t see the fundamentals behind long meal.
The corn is quiet. The Informa company released a corn number today. Their estimate is 14621, the USDA in the last report was at 14586. A very nominal increase. It is my contention the exports are understated. The corn needs every ounce of production due to the shortfall in the global feedgrain supply this year. The corn will have a window through the first quarter where we will be the predominant supplier to the world. It is my belief the corn still has a chance to appreciate. As always quantify your risk.
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