The soy has pulled back recently. The beans have fallen approximately 40 cents. The market is attempting to digest the $12.00 bean price. The question is will there be a reduction in demand due to the elevated prices. The potential answer to this question lies in the weather in South America. It appears there have been some reasonable rains of late. However, there are key areas that remained stressed. The next three weeks will be key to production. There are certainly other considerations. The Chinese demand going forward is critical. Given the administration change it is a reasonable question. The one benefit the US has at present is the fact that the Brazilian is sold out, and Argentina has currency issues that have not allowed the farmer to move product. It is possible going forward that the soy complex could be led by the vegoil if there are further gains. The meal price has allowed for some demand destruction. In addition, and of greater importance, is that the global oil markets are all leaning towards the friendly side. The sunoil market is supported due to the Russia and Ukraine production losses. The palm oil market is supported due to the Malaysian weather as well as physical help. Finally, the canola market is supported through Canadian demand as well as demand for their product. The canola to a lesser extent it seems as the Aussie crop is a bit bigger. The main point of this is look for veg oils to remain supported, especially on breaks. The soy price will be determined by South American weather.
John J. Walsh
President, Walsh Trading, Inc.
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