Soy Market Commentary

walshtrading General Commentary, Grains Leave a Comment

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.

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