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John Walsh General Commentary Leave a Comment

The USDA will release the monthly report fri the 8th. Some questions may be answered . However I was thinking over the weekend about some macro scenarios. First the beans. I have been a bit neutral beans, friendly bean oil, and bearish meal. The three are just starting to come together with the oil share now at a respectable approx 34.4%. This is led by a few factors. First the palm oil market is finally heating up price wise. The Bio demand globally is climbing. Second the world is amply supplied with beans. The Bio demand expansion will push crush in the world and the protein will pressure prices as the Chinese just dont need it today. The ARG and Brazilian will export as much as possible, pressuring US meal prices and ultimately margins. The end game in beans is what ? What if the USDA fails to reduce acres or yield. Then the US is looking at 450 carry this year,potentially 550-600 next year with the SA planting more beans. Consider looking at nearby puts for unsold old crop leaving the upside open. Consider nov 20 at 974, This could look rich in six months. As always these are offered for consideration. Always quantify your risk


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