The markets seemed disappointed today the Chinese weren’t in the market buying Ag goods with abandon. I think it may be fruitful to put the outlook into a short term and a long term approach. In the near term the soy market can, and I believe will rally especially in beans and oil. This rally will be fueled by not only the demand potential (yet to be realized) and the prospect for smaller crops due to the weather uncertainty. This rally in my opinion could send old crop towards 965-975 basis nov. To close above this level may take more problems than are present. The long term in my opinion is a different animal. The new crop above 970 remains a sale . While the carry has drawn down, remember there are plenty of beans in the world. In addition, and perhaps more important, the demand base will find it difficult to expand given the global slowdown the world is experiencing. Protein demand expands in economic positives. Stagnates in less optimistic times. It is my thought that under the Administration the global tide has shifted. The President for better or worse has put the US first. He is essentially halting Chinas advances. This in my opinion is a long term play and wont be changing any time soon. As always quantify your risk.
Be Well