The soy complex was under pressure a bit today. The leader to the down side was the bean oil. The thought with bean oil at present is the palm oil stocks are starting to increase a bit. In addition, the Indian situation with respect to covid can and will slow oil consumption. India is the largest veg oil consumer. This represents real concern. However, the Parana river remains a large logistical concern. The bio fuel mandates remain in place. The tight domestic carry also remains a concern. The main point is that the veg oil market has been the leader but was due a pullback. The oil share is approx 42% basis the July board. It is my thought that the oil share can ultimately trade up to the 50% level. This is not unprecedented. The questions I have regarding the market now are focused on the spreads. The oil spreads and meal spreads both have corrected to the down side. If we have a significant move up again, will it be old or new crop led. As mentioned before risk is up. Always quantify the risk. The USDA report will be released this week. This may present opportunity and should confirm the tight carry.
John J. Walsh
President, Walsh Trading, Inc.
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.