The USDA report today was mostly as expected . The 20/21 carry 135 million bu. The 21/22 carry a bit larger than anticipated at 155 million bu . The reality is both are still tight ending stocks. There exists no global tightness. However, due to the extreme situation in the US, this years bean crop is very important to the global numbers. The weather will be key as said yesterday. The North Dakota crop is under real stress at the moment, as well as some other areas. The current weather models are in disagreement. The US vs European. The end result over the next 10 days will be important to price discovery. The carry in the new crop grew more than anticipated due to the poor meal off take. As said yesterday, the crush is oil driven for the time being. The meal spreads are reflective of the lack of nearby gusto. As far as the vegoil goes, the US is a bit out in front of the global pricing. The issue, however, is that the South American bean oil to the US thought needs to account for 19% duty. Changes the game. In closing, the weather will dictate flat price in the next two weeks before acreage. Quantify the risk.
The USDA lowered both old crop 1107 bil bu, and new crop 1357 bil bu. The global corn stocks declined a nominal amount to 289.4 mmt. The corn story remains a supportive market. The Brazilian second crop failure will continue to push the need for the US to produce a very respectable crop this year. The balance sheet is somewhat tight. The weather will be key in the next two weeks. The risk in the northern belt is not as severe for corn. However, there are other areas that remain key, experiencing some concern. The demand will be a driving factor as well as the acreage at the end of the month. It is my hope that corn has one more nice rally prior to acreage. Quantify the risk
John J. Walsh
President, Walsh Trading, Inc.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.