SOY
The beans are supported today. The old crop tightness has been supportive of late this week. The market in my opinion may have dialed the old crop stocks in to the price. The market at some point will begin to focus on the more than ample supply shaping up for the new crop. The weather of course will play a key part to price discovery going forward. It is true in my opinion that the present weather is good. It may show condition improvements come next week. This while conditions are rated equal to the 10 year average. The market will focus on the USDA acreage estimates tomorrow. The average guess is looking for a slight reduction in acres. While this could certainly happen, I will not be surprised to see a slight increase in acreage. The thought on this was the difficult planting scenario in the northern states that may have led to some shift. This of course remains to be seen. If this does transpire, the bean market may start lower again, looking to test recent lows.
MEAL/OIL
The meal has gained on the bean oil of late. The oil share has fallen from approx 50% to the current level of approx 44%. It is my thought that the meal can continue to be the leader on a relative basis. In addition perhaps the beans can start to lose to both products on a one to one basis. The veg oil market at present is starting to be very well supplied. The Indonesian Palm oil stocks now are burdensome. It is due for the Govt to reduce tariffs and let exports go. If this transpires the veg oil could start to decline. Let’s see what tomorrow brings.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
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