GENERAL – The CRUDE is forging highs today. The fundamentals remain very supportive. The US is not going to change policy. In addition, the UAE indicated that the ability to raise supply relative to the demand is limited. The markets will be supported on the fundamentals and the technical outlook. The big banks, led by Goldman are predicting 140 dollar crude. EQUITIES – The market continues lower today. At present we are in a bit of a sideways range in what I perceive to be a bear market. The moderation in inflation at present may offer a relief rally. Do not get confused. Though the inflation may slow, it is only due to such an increase in the last year since Biden took office. Look for rallies as opportunities to sell. In my opinion. The cost of capital as well as outside influences will weigh on the balance sheet of most companies. The market will settle lower and present opportunities for strong companies in my opinion. Remain patient.
SOY
The beans continue to rally on demand from China. In addition, although not a current issue at present, concerns over some dryness is starting chatter. The bean market overall is off to a good start. The market is at present on pace for trend line yields. As usual, the market could build in some weather premium early. The USDA report will be released this week. The new crop needs to be watched. There should be a realization of almost 100 mmt global carry. This is significant. At present however, the market is not concerned with new crop. The old crop tightness is leading the charge.
MEAL / OIL
The uncertainty in Palm oil production, as well as large blending is supporting the bean oil market. The oil share now at 50% of the crush value. This has put the price of beans relative to meal at an all time high 1-1. The market timing will be key. The global fundamentals are still old crop supportive. Take not however price rationing is under way and will be felt in the next few months. Patience is required.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
[email protected]
www.walshtrading.com
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.