SOY
The market has been under pressure the last two sessions. The USDA report was bearish. A bit bearish looking at the domestic numbers. The global numbers were the second largest on record with a very ample stocks to usage ratio. In addition, although the crop conditions declined again nominally. The weather has turned beneficial at a key time. The recent rains could very well add bushels over the next three weeks. The remaining dry areas will start to feel relief. The global demand base is also in question at these levels with the Chinese in a real slowdown. As I mentioned some time ago. The world is slowing all at the same time which signals a slowdown in demand. MEAL – The meal market has been the leader of late with oil share losing a 8-10%. This was due to the nearby tightness in the global meal market due to the slowing of crush in the southern hemisphere. This had a relative impact as well as a flat price impact. The meal market on a flat price perspective may have run its course. BEAN OIL – The bean oil has been the weak aspect of the soy complex. The palm oil market has yet to rebound. To the contrary. The palm oil has been a deep discount to bean oil on the global market. This was significant and weighed on prices. The discount has narrowed nominally, however the market in palm still remains a discount as the palm oil stocks are still elevated as exports remain sluggish. The main point of this article. In my opinion the soy complex has posted a high and will work lower. The market may have some rallies but they represent opportunities to sell.
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
312-208-8836
jwalsh@walshtrading.com
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