The soy continues to be led by the meal. There are some considerations to take note of. The meal spreads have all inverted. This is an obvious indication of a friendly scenario. The bean carry on paper is friendly. The question going forward is how much of this is dialed into the current price. Also, will the Chinese actually take delivery of the beans that have been purchased. Is it possible that the recent purchases are to cover concerns regarding the late soy plantings in the southern hemisphere.
This leads me to the corn market. The recent Chinese purchases lend credence to the overall concerns regarding the Chinese Corn crop. The reality could be worse than the theory going forward. It is important to note as well that the corn spreads have or are attempting to invert. The corn numbers domestically could continue to tighten a bit in my opinion. It appears that the corn should be supported on any pullbacks. Given the prices and the recent rally it is possible the corn is close to a near term peak. However the long term may still hold a friendly market.
John J. Walsh
President, Walsh Trading, Inc.
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