GENERAL – The Crude is down as we speak 3.00 per barrel. I have no Idea if the market is going to $140 as many of the large banks have suggested. My question regarding that is at what price do you shut consumption down. There are only so many dollars the consumer will spend. Then it is cut back. We, in my opinion, are starting to see that at these levels. Hence the reduction in housing applications. The reduction in lumber prices. ETC , ETC, . The energy prices are having ramifications globally. This is just starting. The stocks are lower after trying to rebound. The FED should raise rates tomorrow .75 basis points. This could spark a rally in stocks. The reality here in my opinion is that the rates increase while necessary. May not accomplish what is desired. The Genie is out of the lamp. There are too many things upside down. The problem stems from poor management and poor economic philosophy. The rate increases won’t solve that. It will however make borrowing more difficult. And more expensive.
SOY – The beans are under a bit of pressure after a higher trade. The beans do have a tight domestic balance sheet. However, South American beans are cheaper at present. The crop condition ratings are excellent at present. The market appears concerned with the current weather. It gets hot in the summer. It is early at present to hurt the crop. The global numbers show larger old crop stocks in the southern hemisphere. In addition a slowing of demand from China. Without a major weather problem in the US, the world is heading to a large surplus. Volatility will reign king. Exercise caution. The bean spreads are key and should be watched. The meal oil relationship may be close to changing. The Palm oil situation is changing rapidly. The world supply of Palm will increase in the near term. This is important and will change dynamics. The meal has yet to show any real strength as the Chinese demand has slowed for protein with the Lock Downs. This is slowly changing and should see more demand in the near term.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
jwalsh@walshtrading.com
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