GENERAL
The crude is up $5.00 per barrel today. The macro concerns continue to feed a bid. The stocks are down again with the Dow down over 300 at present. The macro is down here in my opinion. The value hunters will buy and continue to lose. The reality is the global fundamentals have changed. Interest rates are rebounding, the macro here remains down, but due a bounce. The talk today is inflation will moderate because CPI did not continue to expand. However, it is way outside the norm. The interest rates will continue to climb. There will be an effort to contain however due to the cost of capital. Including the US debt load.
SOY
The beans rebounded again with the market eyeing the USDA report tomorrow. The rally may be on thoughts of the old crop carry drawing down a bit further. It is, however, my thought that the new crop is underestimated with global demand slowing and acreage going up. The USDA is difficult to predict. Planting is moving forward. However, the north states need to be watched. There are rain chances next week that will have an impact if received.
MEAL / OIL
The oil share had a large day up with the palm oil climbing back last night. In addition the thoughts that the global vegoil market is still not rationing. I’m not sure this is the case. Stocks are slowly climbing. The sunoil should come back on line soon. The market also is awaiting significant biofuel mandates being canceled. The meal on a relative basis is reeling, getting buried with oil share in the July above 50%. The meal on a flat price basis is weaker steadily over the past couple weeks. This 400 area may hold some value. Let’s see what the report brings.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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