The markets were two sided today. There are some considerations at present in my opinion. First, the Brazilian crop will start to be marketed. This will not add to the US carry obviously. But it will knock the US out of contention in the export arena. This could limit further gains in the short term. It is my thought that the meal may continue to stay under some pressure. The July Dec spread continue to erode. The veg oil market on the other hand has been on fire. This is true for both flat price and the spreads continue to gain. It is my thought this can continue a bit longer. Exercise caution as always. The bean oil continues to be supported due to competitive oil strength. In addition, the growth with global bio fuels. The bean oil spreads are really inverted. This is a sign of potentially continued strength.
The Corn market continues to act strong. The concerns over the safrihna crop is real. There is a reason to believe the yields could come in under trend. In addition, the Chinese bought a respectable amount of US corn. This is a boost to the market and may indicate Chinas continued need for corn. The July Dec corn spreads continue to rebound from recent lows. The question now will be if the spread will climb all the way back to highs. As always quantify your risk.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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