SOY COMPLEX
Today was a fairly uneventful day when the dust settled. When we leave the month of March we will have a few answers to this puzzle. The USDA will release WASDE this Thursday and we will look at the USDA numbers. In play are the US carry and the production out of South America. The big question is the drawdown in ARG vs the increase in Brazil. The Arg estimates are all over the map. The Brazilian crop by most accounts is huge. But, how huge? 114 or 117. A big difference in a sense. Those extra bushels will prove important to dominate the export cycle for the next 3-6 months. The US is already loosing market share. If the drawdown in ARG is bigger than expected we could witness more fund buying. The interesting thing to note here is that the bean plant can sit and wait till rains are received, so there is still time for crop improvement in arg. The facts of the market as I perceive them here today. We have witnessed a large rally in both Meal and Beans, the funds are long a record meal position and alot of beans. The global supply situation is very ample and at least 25 million metric tons above 2 seasons ago. This rally should move 2-3 million more acres to beans. With a reasonable Wasde estimate from South America, a few late showers, and the prospective planting report. The market should be at or near a high. Within 15-20 cents old crop. The nov18 at 1040 is rich. The 1020 level presented opportunity. This level, 1040, presents opportunity to hedge.
There are ways to craft a position that hedges with a covered defined risk.
For a detailed conversation please call 800 993 5449 or jwalsh@walshtrading.com.
There is a sure thing at these levels. To speculate for further gains should be done with a prudent amount. Lock up some profits.
CORN
The Corn has reached my upside targets that I have written about. A correction may be forthcoming. In my opinion the correction is managable and will present opportunity. The Corn is in a nice position from an export stand point. Also, the acreage decline if realized will give us a further reduction in stocks. The early planting in the DELTA is hindered in some ares by moisture. Given the prices, this could move acreage into alternate crops, beans and potentially cotton depending on the area and machinery availability. It is possible to make a scenario where Corn comes out of March with an opportunity to make significant gains relative to Beans from a price perspective. Both in real terms and in terms of a relative basis.
Again, opportunities – call or email to discuss.
TECH
The markets have not moved through key tech levels yet that I watch, that would indicate a change in direction. We will see what tomorrow brings.
Alot of money at risk at present call for a free outlook. Hope and Prayer are not a marketing plan.
John Walsh, President, Walsh Trading, Inc.
800-993-5449
jwalsh@walshtrading.com